Another Rental Property Depreciation Question

David · 2008-11-15T00:07:34+00:00

First, thanks so much for the response on the earlier questionsposted. Now for two new situations:One of my properties consists of an older house on a nice lot. Ipurchased it with the idea to eventually tear down the house andrebuild a new home on the site. The house is currently beingdepreciated and used as a rental property.Scenario #1- If I demolish the structure and build a new rental home,will I have to recapture the depreciation on the demolished structurewhen I eventually sell? Also, how would the demolition cost behandled? Scenario #2- If I demolish the structure and build a new home for apersonal residence will I have to recapture the depreciation on thedemolished structure when I eventually sell after living in it for therequired two years? Again, how would the demolition cost be handled?